Overview of Tubular Bells Strategies, Challenges, and Technologies Mike McEvilly

February 19, 2015

1 Agenda • Project Overview – Summary – Unique Aspects of the Project – Strategies – Project Schedule – Drilling/Completions and Subsurface – SURF – Hull & Mooring – Topsides • Fabrication / Installation / HUC – Summary – Hull Fabrication – Topsides Fabrication – Temporary Workdeck – Offshore Campaign – Topsides Lift Plan • Project Focus Areas / Challenges • Questions? 2 Project Overview – Summary

PROCESS DESIGN Oil Handling 60,000 BOPD Gas Handling 135 MSCFD Maximum Fluid 75,000 BFPD Water Handling 50,000 BWPD Water Injection 60,000 BWIPD

PROJECT MILESTONES / GENERAL INFORMATION Sanction June, 2011 (HES) Aug. 2011 (CVX) Williams Fac. Agreement Oct. 2011

Working Interest 57.14 Hess, 42.86 Chevron; BP withdraw Sept. 30, 2011

Topsides Lift / Operating weight: Wells (Prod/Inj.) 3 - 5 / 2 – 3

7,500 / 8,600 tons Total Project Cost <$3B (excluding Hull/Mooring, Topsides, and Export Pipelines) Water Depth ≈ 4,300 ft. Reservoir Characteristics 15K/ 250° F Project TRIR =0.29

3 Unique Aspects of the Project

• Field first discovered by BP in 2003

• Facility Host provided by Williams (Topsides, Hull/Mooring and Export Pipeline system)

• Under-appraised field/ reservoir

• First floating production system in the Gulf of Mexico for Hess Corporation, and worldwide in ten (10) years.

• The engineering and construction of the project was conducted almost entirely within the US

• High Pressure (15K)/ High Temperature (250° F) Reservoir

• 3 Years from Full Sanction to First Oil

4 Strategies

• Due to the perceived economics at the time of sanction, a third-party host was selected as the facilities infrastructure

• The timing of the sanction was driven in part by the imposed “suspension of production” deadline by the government.

• The field was under appraised, therefore the first well (well “B”) would “prove up” the center of the field.

• Seawater injection would be installed to improve overall recovery, and begin within the first year following commencement of production

5 Strategies (Cont.)

• The wells would have the surface casing strings (through the 22”) batch installed to mitigate the risk for swallow water flow. In addition, a “spare” top hole was provided for at each drill center.

• An “ILS” (In-line sled) was installed to accommodate well “C” (Center of the field) if well “B” was successful.

• A subsea production manifold was installed at Drill Center 2 to provide for additional subsea tiebacks.

• An additional production separator was installed and outfitted for future tiebacks.

• The isolation points for the future piping tie-ins for the Gunflint subsea tie- back were addressed prior to installation of the Topsides.

6 Project Schedule

11/13/14 3 Year Project Duration

7 Drilling/Completions and Subsurface • Current Development Plan − 3 to 5 Producers and 2 to 3 Water Injection Wells − Have drilled 4 producers; completing the fourth producer Stena Forth (Drill ship) • Sanction Development Plan − 2 Drill Centers, 3 Production Wells and 2 Water Injection Wells − Subsea Infrastructure tied back to a Williams Partners owned Floating Production System (FPS) • Batch Set 9 top holes (through the 22” casing point) • 748’ long and 138’ wide − Provide a spare top hole at each drill center • Dual Derrick System (1,000 ton & 600 ton) • Max Personnel: 180 − Results of the first well exceeded high-side reserve estimates, and enabled well “C” − Plan to complete production well drilling/completion activities in 2Q 2015. Additional exploitation wells currently being evaluated.

8 Drilling/Completions and Subsurface (Cont.)

4 2

Current Base Case: 4 Producers (wells A, B, C & D) & 2 Water Injectors (wells E & G)

• Well C is an N1 sand west area producer added due to the upside well B N1 sand result • Well D focus is N2 sand with a future recomplete to the J4 sand • Well G injector optimized to support the larger N1 sand volume west of the brown fault 9 • Well H is a K6 sand producer opportunity that will be proposed for approval in 2015 Drilling/Completions and Subsurface (Cont.)

DEPTHDEPTH (ft) (ft)NW NW SE SE

Sea-bedSea-bed 36” 36” 4,500’4,500’ Ursa BlueUrsa SWFBlue SWF 28” 28” Ursa GreenUrsa Green SWF SWF 22” 22” 10,000’10,000’ PurplePurple sand HCsand HC SUPRASUPRA-SALT-SALT Top ofTop Salt of Salt 18” 18” SECTIONSECTION

11 ⅞”11 x ⅞”10 x⅛” 10 ⅛” 15,000’15,000’ Tie-backTie-back ALLOCHTHONOUSALLOCHTHONOUS SALTSALT CANOPY CANOPY 13 ⅞”13 Scab ⅞” Scab Liner Liner 16” 16” 20,000’20,000’ BaseBase of Salt of Salt 13 ⅝”13 ⅝” MIDDLEMIDDLE MIOCENEMIOCENE K SandK Sand 25,000’25,000’

10 ⅛”10 ⅛”

N SandsN Sands Well Final TD 7 ¾” 7 ¾” 30,000’30,000’ (~25,000 ft) LOWERLOWER MIOCENEMIOCENE

Typical Well & Casing Design

10 Drilling & Completions (Cont.)

• Post Macondo Impact − Additional BOP tests – Increased duration and frequency (nominal 14 day duration) − Pull BOP, stump test, and re-run required once per well − 14” scab tieback for collapse requirements for survival loads − Access to containment response equipment (Helix Energy Solutions & Marine Containment System) 11 SURF Architectural representation of Subsea infrastructure • Line Pipe: 8.5 mi of 8”OD x ~1.2” WT, Tenaris Italy • Riser Pipe: ~1 mi. of 8”OD x ~1.5” WT, Tenaris Italy • Export P/L: 16 mi P/L + mi. riser of 12” OD x 0.688-in WT and tied into 18-in Williams Mountaineer (oil) and Canyon Chief (gas) pipeline systems

Oil & Gas Export Pipelines

Water Injection Line Well “C” ILS

Drill Center 2

Drill Center 1

Major Contract Interfaces with: • Technip • Weatherford Flowlines • Oceaneering Umbilical • FMC Manifold designed to • Subsea 7 accommodate future • Proserve production tie-ins

13 Spooling Operations Technip’s Spoolbase Mobile, AL

13 Offshore Installation

14 Hull & Mooring • Classic Spar Hull design • ABS Class: Floating Offshore Installation (FOI) • 85’ OD x 30’ Center-well x 60’ Freeboard x 524’ Draft • Fixed and variable ballast tanks • 17 Blocks: A (top of Spar) and Q (Keel) • 2 access shafts (from top of Spar to Block G) • Weight ~29k kips (Structure ~20k + Outfitting ~9k) • 5 SCRs (Riser Porch) + 1 Umbilical (Center- well)

Riser Porch

15 Hull & Mooring (Cont.) Mooring HPU Electrical Deckhouse

2 Firewater Pump Skids Topsides Supports

Centerwell 4 Seawater Lift Pumps

Chain Jacks (9 total)

Closed Drain Tank Access Shafts (2 total) Ventilation System (2 Air Handling Units) 18 Chemical Tanks + 2 Potable Water Tanks 4 Integral Tanks (Oil, Diesel & (Located inside of Hull) Methanol) Located underneath top of Hull Strakes

16 Hull & Mooring (Cont.)

• Sail date of February 8, 2014 from Ingleside, Texas • Towed for a Distance of 515 NM • Average speed 5 kn • 5 days to tow out to the Tubular Bells location

17 Topsides – 3-level deck structure – 50 POB Living Quarters/ Lifeboat Capacity for 60 POB – 3 x 50% Solar T60 Generators (~8MW normal operation) – 3 x 2- Phase Production Separators and 1 x 3- Phase Test Separator – 2 x 50% Solar T60 Turbine Driven Flash Gas Compressors – TEG Dehydration (2-lb H2O/ MMSCFD gas)

18 Topsides (Cont.)

(2)Gas Compressors Living Quarters Seawater Motor Control Injection Center Pumps

(3)Turbine Generators 60 man survival crafts Inlet Manifolds & Launcher/Receivers

19 Fabrication / Installation / HUC

20 Fabrication – Summary

• Gulf Island LLC • Dolphin Services – Topsides – Hull spool piping – Living Quarters – Topsides Alloy Spool Piping – Hull Section “Q” – PLETs, PLEMs and ILSs (SURF) • Gulf Island Marine Fabricators • Intermoor – Hull Section “A”, Water Tight Flats “B”&“Q” – Suction Piles-Qty 10(Ø 16’x 97’ long) • Gulf Marine Fabricators • NRG Manufacturing – Hull Fabrication – Subsea Manifold – Hull Blocks M/N and O/P - subcontracted to – Chemical Tanks Signal International

21 Fabrication – Summary (Cont.) Bulk of Fabrication Took Place in the USA

Location of Fabrication Yards

(#) 22 Hull • Primary Contractor - Gulf Marine Fabricators; Ingleside, TX

• Major Subcontracts to Signal International, Gulf Island Marine Fabricators and Dolphin Services.

• All Blocks were fabricated in quarter jigs; assembled into super blocks and lowered into the Graving Dock for final assembly and fit out Blocks A through Q

23 Hull (Cont.)

250’ 745’

13 blocks 40’ (D – P)

Block Q

Super Block A/B Mammoet Crane (3,200 ton) Block C

24 Hull (Cont.)

Pull Tubes Guides

Centerwell

Double Wall Bulkhead

Anodes Outer Shell

Block “J” Assembly

25 Topsides

Cellar Deck Float Production Deck Float Main Deck Float

Flare Boom Lift Stabbing pin into hook Flare Boom lifted and stab into place

26 Topsides (Cont.)

Topsides (South side) Helideck (South side) lights turned on for the 1st time

Helideck Hanging boom rest for Seatrax crane

27 Temporary Workdeck • Multipurpose design for – Hull mooring system installation – Riser pull-in’s – Tie-in spool installation assistance – Flowline and export pipeline hydrotesting

– Main Umbilical pull-in Chain Jacks Wave – Hull Carry-over work completion/ Deflector Commissioning of Hull • 120 ft x 90 ft plated deck area with Helideck for light twin engine helicopters • Crane with 100 ft boom and 35 ton capacity; Seatrax rental crane

28 Offshore Campaign Phase I • Suction Piles (9) installation, Mooring lines pre-layed • Trip 1A/1B-SCR’s and production/water injection flow-lines out to 17,000 ft. • Subsea production manifold installed, main and infield umbilical wet parked

Suction Umbilical Reeling Pile Operations in Panama City

Production Manifold

29 Field Layout –SCR & Flowline Installation

30 Hull UpEnding Phase II

31

Riser Pull-In: SURF & Exports Steering Sheaves

• Steering winches supported from temporary workdeck • Three steering sheaves to control horizontal pull-in • SCRs to be recovered and hung-off

Riser Porch

32 Tie-in Spool Installation SCR Hang- Off

33 Topsides Load Out onto Cargo Barge

34 Plan of Topsides Lift from Cargo Barge Temporary Work Deck (TWD) Removal Lifting Topsides from Barge

• Tandem lift of TWD – Port side lift with • Tandem lift of Topsides – Bow side Aux blocks (900 mT) • Move S7000 toward Hull and lower • TWD to be placed on Barge Starboard Topsides onto Hull side

35

Temporary Work Deck

Installation (02/15/14) Removal (03/07/14)

36 Topsides Lift and Set

37 Project Focus Areas / Challenges • Managing interfaces and ensuring communication across all work groups – Due to the unique nature of the contract, there are more interfaces than would typically be expected (company- company-regulatory entities, company-contractor and contractor-contractor) • Relocating the Spar location from MC Block 728 to Block 724 • Ensuring compliance and enhanced reporting requirements in the GOM Post-Macondo era • SIMOPs; Coordinating multiple vessels during the Offshore Campaign for deferred scopes of work • Mitigating risk and minimizing the effects of schedule delays (i.e. Hull) • Accommodating additional work scope in the already aggressive project schedule – Due to the positive results of the first well, the project incorporated additional design scope to allow for future expansion of the subsea and topsides facilities – Additional work scope introduced during the hook-up • Supporting Williams and managing work scope associated with future Gunflint tie-in to minimize impact to production • Managing and aligning drivers between Hess and Williams • Assuring an adequate hand-over to operations while building/assembling the necessary operations expertise and experience.

38 Tubular Bells First Oil

First Oil November 13, 2014

TBells is Producing with Three Wells:

37,000+ BOPD

85+ MMSCFD

51,500+ BOEPD

39

QUESTIONS?

40 Contact Information

Presenter: Mike McEvilly Title: Project Director Company: Hess E-mail: [email protected] Phone Number: (713) 496-6855

41 42 BACK-UP

43 Project Overview

MAJOR CONTRACTS • Williams Field Services owned facility operated by Hess with exclusive production rights for first 5 years • Topsides Engineering & Procurement – Woodgroup Mustang (WGM), Houston, TX (SystemPacs – EDG, Metairie, LA) • Topsides Fabrication – Gulf Island Fabrication (GIF), Houma, LA • Hull Engineering & Procurement – Houston Offshore Engineering, Houston, TX • Hull Fabrication – Gulf Marine Fabricators (GMF), Ingleside, TX – Gulf Island Marine, Houma, LA • SURF Engineering & Procurement – IntecSEA, Houston, TX • E&I Installation – MMR Group • Offshore Installation (Topsides) – Saipem 7000 • Offshore Installation (Hull & Mooring and SCR Recovery/Hang-off) – Heerema Marine Contractors, Balder • Offshore HU&C – PES (Performance Energy Services) • Temporary WorkDeck Fabrication – Allison-Marine, Morgan City, LA

44 Schedule - Historical Overview

3 Years for Detailed 8 Years prior to Project Sanction Design and Execution

Tubular Bells Journey to date Planned Forecast

2003 2006 - 2007 2010 2011 2012 2013 2014

Field UOA signed - Acquired add’l Acquired add’l Batch 1st oil production program Add C producer rd discovered by MC 725 unit in 20% WI and 17.14% WI due to completed to development 3 Quarter 2014 9 top holes TB-1 in 2003; 2006 operatorship BP unit withdrawal; plan Hess earned from BP; Hess Hess WI share = 20% WI in WI share = 40% 57.14% ‘B’ well ‘D’ well TBells leases TD’d Oct. 12 TD’d Apr. 21

Sanction ‘A’ well TD’d Sept. 22

45 Topsides Fabrication (Cont.)

Skid ways progress preparing for load out

46